Wednesday, July 09, 2014

Wednesday Watch

Evening Headlines 
Bloomberg:
  • Israel Strikes Gaza by Air and Sea to Halt Rocket Attacks. Israel struck 150 targets in the Hamas-controlled Gaza Strip and authorized the call-up of 40,000 reservists as it weighed a possible ground operation to quell weeks of Palestinian rocket fire into its territory. Gaza emergency services chief Ashraf al-Qedra said 16 people, including five children, were killed today as Israel’s offensive expanded. Militants raised the stakes by firing rockets in the Tel Aviv and Jerusalem areas for the first time during the latest round of violence. They also infiltrated Israel by sea and battled troops near an army base. 
  • Snuffing Out Shisha Alienates Iraqis Bemoaning Islamic Clampdown. Iraqi laboratory technician Younes was smoking a shisha water pipe and playing cards with his friends in the Iraqi city of Mosul last week when a dozen men with Kalashnikov rifles over their shoulders showed up. “They told the cafe owner that allowing such forms of entertainment was sinful and they didn’t leave until he pledged to ban it,” said Younes, 30, who was too scared of reprisals to give his full name. “We’re hurtling fast toward the unknown.
  • Asian Stocks Drop as Corn Extends Slide; Copper Advances. Asian stocks fell, with the regional index declining a second day, extending a global retreat in equities amid concern valuations are too high. The yen held gains as copper climbed while corn futures continued their longest slump since November. The MSCI Asia Pacific Index lost 0.4 percent by 10:06 a.m. in Tokyo, set for the steepest one-day drop in 2 1/2 weeks as Japan’s Topix index slipped 0.5 percent in a third day of declines.
  • Republican Bill Seeks Monetary Policy Rule for Fed. House Republicans proposed legislation to limit how the Federal Reserve makes monetary policy, a week before Chair Janet Yellen is scheduled to deliver her semiannual testimony to lawmakers. “It’s broadly consistent with Republicans’ continued anger with the Fed and seems to reflect a continuing concern that it’s time for the Fed to get further down the exit path and start raising rates,” said Sarah Binder, a senior fellow in governance studies at the Brookings Institution in Washington who specializes in studying Congress’s relationship with the central bank.
Wall Street Journal:
  • Israel, Hamas Escalate Violence. Gaza Launches Barrage of Rockets, Airstrikes Send Palestinian Death Toll Up. Palestinian militants in the Gaza Strip unleashed their most far-reaching rocket attack ever on major Israeli population centers, as Israel said it was launching a protracted assault on the territory's Islamist rulers. Warplanes hit 150 purported militant sites on Tuesday alone and the Israeli government authorized the call-up some 40,000 army reservists, mobilizing for the third large-scale military operation against Gaza in... 
Fox News:
MarketWatch.com:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
  • ICE CEO calls for market-wide purge of order types. In a perfect world, stock exchanges would collectively agree to ban order types that critics allege create complexity and may give certain traders unfair advantages, Intercontinental Exchange Group chief executive Jeffrey Sprecher told lawmakers on Tuesday. 
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -1.0% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 102.50 +2.5 basis points.
  • Asia Pacific Sovereign CDS Index 70.75 +.5 basis point.
  • FTSE-100 futures -.04%.
  • S&P 500 futures +.02%.
  • NASDAQ 100 futures  -.04%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (WDFC)/.72
  • (GY)/.09
Economic Releases
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,744,440 barrels versus a -3,155,000 barrel decline the prior week. Gasoline inventories are estimated to fall by -522,220 barrels versus a -1,235,000 barrel decline the prior week. Distillate supplies are estimated to rise by +877,780 barrels versus a +975,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.14% versus a +2.9% gain the prior week.
2:00 pm EST
  • Fed Minutes from June 17-18 meeting.
Upcoming Splits
  • (ALK) 2-for-1
  • (ACIW) 3-for-1
Other Potential Market Movers
  • The China CPI, BoE rate decision, Australia unemployment report, China Trade Balance, 10Y $21B T-Note auction, weekly MBA mortgage applications report and the (SLXP) investor day could impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

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